Correlation Between SYSTEMAIR and Philip Morris
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR and Philip Morris at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SYSTEMAIR and Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and Philip Morris International, you can compare the effects of market volatilities on SYSTEMAIR and Philip Morris and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SYSTEMAIR with a short position of Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and Philip Morris.
Diversification Opportunities for SYSTEMAIR and Philip Morris
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SYSTEMAIR and Philip is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and Philip Morris International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philip Morris Intern and SYSTEMAIR is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SYSTEMAIR AB are associated (or correlated) with Philip Morris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philip Morris Intern has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and Philip Morris go up and down completely randomly.
Pair Corralation between SYSTEMAIR and Philip Morris
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 2.29 times more return on investment than Philip Morris. However, SYSTEMAIR is 2.29 times more volatile than Philip Morris International. It trades about 0.1 of its potential returns per unit of risk. Philip Morris International is currently generating about 0.18 per unit of risk. If you would invest 531.00 in SYSTEMAIR AB on September 3, 2024 and sell it today you would earn a total of 251.00 from holding SYSTEMAIR AB or generate 47.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYSTEMAIR AB vs. Philip Morris International
Performance |
| Timeline |
| SYSTEMAIR AB |
| Philip Morris Intern |
SYSTEMAIR and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and Philip Morris
The main advantage of trading using opposite SYSTEMAIR and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR position performs unexpectedly, Philip Morris can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Philip Morris will offset losses from the drop in Philip Morris' long position.| SYSTEMAIR vs. SAFETY MEDICAL PROD | SYSTEMAIR vs. THORNEY TECHS LTD | SYSTEMAIR vs. RCM TECHNOLOGIES | SYSTEMAIR vs. Microbot Medical |
| Philip Morris vs. British American Tobacco | Philip Morris vs. Japan Tobacco | Philip Morris vs. JAPAN TOBACCO UNSPADR12 | Philip Morris vs. Imperial Brands PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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